One of the the world's biggest content distribution sites -- and oft a piracy tool -- is no longer with us

The U.S. government, still digesting the massive public outcry against the "Stop Online Piracy Act" (SOPA) (H.R. 3261) and "PROTECT IP Act" (PIPA) (S.968), executed what it calls a major anti-piracy operation Thursday afternoon, working with American ISPs to block access to top content upload site Megaupload.com, which the government alleges is a source of persistent copyright infringement.

I. RIP Megaupload

Four of the site's seven core admins were arrested by police in New Zealand, in cooperation with their American peers. According to the most recent report all seven admins have since been taken into custody.

Megaupload was rated the internet's 72nd most used website, and at its peak was the 13th most popular onine property in the world.

The site was founded in Hong Kong by wealthy entrepeneur Kim Schmitz (aka "Kim Dotcom), a German expatriate with a flare for controversy (and in his earlier days insider trading and hacking). Kim Dotcom reportedly was living in a NZ$30M ($24.08M USD) outside of Auckland, New Zealand, living a cozy existence under the psedunonym "Kim Tim Jim Vestor" and sporting a fake Finnish passport.

Part of the so-called "Megaworld" franchise, Megaupload offered 200 GB of storage space to users for free. This allowed users to share content with each other. The only downside from a convenience perspective was that sharing worked through a queue system. Buying a paid account removed the queueing system and its annoyances, allowing you to upload and pass direct links to your friends.

MegaUpload is no more. [Images Source: MegaUpload via Venture Beat]

The site's easy to use model earned it "more than 150 million registered users, 50 million daily visitors and accounting for four percent of the total traffic on the Internet" according to the U.S. Department of Justice's (DOJ's) complaint filed against the site and its administrators

II. Feds Kill MegaUpload Abruptly, Arrest It's New Zealand Admins

The DOJ accuses Megaupload of acting as the internet's mixtape site and engaging in massive scale copyright violation. While Megaworld's user policy states that it does not condone infringement and complies with Digital Millenium Copyright Act (DMCA) takedowns from the U.S. federal government for users found to be infringing content, the DOJ argues that the site was support criminality.

It points to $175M USD in property -- including 15 Mercedes, a Maserati, a Lamborghini, a Rolls-Royce with the license plate "GOD" -- that it seized during its raids on the suspects' property. The DOJ claims that Megaupload masterminded the theft of over $500M USD in copyright work.

The inviduals arrested during the raid, according to the indictment, are:
• Finn Batato, 38, a citizen and resident of Germany, MegaWorld's chief marketing officer;
• Julius Bencko, 35, a Slovakian national who is the graphic designer;
• Sven Echternach, 39, a citizen and resident of Germany, who is the head of business development;
• Mathias Ortmann, 40, the company's chief technical officer, co-founder and director; who previously split his time between Hong Kong and Germany, his native home.
• Andrus Nomm, 32, a megaworld Estonian software programmer and head of the development software division;
• Bram van der Kolk, aka Bramos, 29, a Netherlands native who assisted in programming and network engineers consultant for Mega conspiracy websites.

Again, the site was for profit and insists that it had gone legit and was not supporting piracy.

UMG was particuarly peeved when several of its artists including Kanye West, Will.I.Am, Jamie Foxx, Sean "Diddy" Combs, Alicia Keys, Chris Brown -- performed a video plugging the site -- titled "The MegaUpload Song":

The UMG briefly suceeded in convincing sites like Google Inc.'s (GOOG) YouTube into false takedowns, but when Megaupload produced documents indicating that the artists all legally agreed to make the song, the track was restated to UMG chagrin.

The DOJ's press release can be found here. The full complaint can be found here [PDF].

The DOJ appears to have sided with the irrate UMG in punishing MegaUpload. It justifies the seizure of $50M USD worth of server electronics in Ashburn, Virg.; Washington, D.C.; the Netherlands; and Canada, by claiming Megaupload's linking system inherently encouraged piracy. It also accuses Megaupload of failing to process takedown requests on users found to be pirating.

As of 10:00 p.m. EST, these attacks had almost completely subsided allowing normal access to the targeted sites. Megaupload, on the other hand, remains quite dead.

Some members of the group-without-a-leader posted a message on the Twitter account @YourAnonNews, stating, "The government takes down #Megaupload? 15 minutes later #Anonymous takes down government & record label sites. #ExpectUs."

Ha, that would make their "hacks" a lot less remarkable, huh. But I actually think that Anonymous & SOPA/PIPA are totally different issues. Anonymous is already utterly illegal, what would a new bill against them do? Take away soap in prison?

My point is that there's a real danger that SOPA supporters will trot out a fallacious 'guilt by association' argument to assassinate the character of those opposed to SOPA by equating them with Anonymous and what are viewed by the general public to be their "shenanigans". It's super-easy to do when governments can play on the mainstream media like a huge keyboard, and so many members of the uninformed public just eat straight out of the hand of the media and don't even think of the fallacy being committed.

The Congress and Senate clearly want this, because they're paid handsomely to represent Big Media (hence it's technically their "job" to do so, not even considering the megalomania streak of some legislators), and I'm sure they see the U.S. Internet public as just getting in the way now. We've probably left more than a few congressmen and senators wondering whether they'll get their full payday from Big Media after the big protest and the eventual 'shelving' of SOPA. The only thing standing between the SOPA bill and a SOPA law is us -- the people. And SOPA isn't going to go away. It's going to keep coming at us, with more money, more bought legislators, and more pressure, and more measures taken to keep it out of the public eye. It would be only too easy to attach the provisions of SOPA to a must-pass, "We can't wait!" defense spending or debt ceiling (endless borrowing) bill and have it pass under the radar of the public until it's too late. After all, we now have the NDAA that permits indefinite detention of U.S. citizens on a whim, and there was no public outcry over that (except from a few informed and freedom-loving sources).

Our only hope is to somehow have a say over who the supreme court justices are, and to elect senators that will properly vet and not confirm activist or corrupt nominees, so that these provisions can be tested for Constitutionality.

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